Home loans at historical high driven by tax exemption.
The number of new housing credit contracts reached a record value, mainly driven by the financing granted to individuals up to 35 years old with tax exemptions, according to data released by the Bank of Portugal (BdP).
Mortgage credit at record value justified by exemption from IMT and stamp duty.
The total amount of new home loan contracts increased by 4.5 billion euros, reaching 17.6 billion euros in 2024. This is the highest value recorded since December 2014, according to data from BdP disclosed in Notícias ao Minuto.
According to the banking supervisor, growth was driven by credit granted to borrowers under 35 years old, who represented 47% of new permanent own housing contracts from August 2024 (compared to 37% between January and July).
This increase was influenced by the entry into force in August of Decree-Law No. 48-A/2024, which exempts young people up to 35 years old who acquire their first home from paying IMT and stamp duty.
The new consumer loan contracts increased by €6.0 billion, totaling €26.5 billion in 2024. These transactions represented 77% of the total new consumer loans, up from 63% in 2023.
The increase was observed in all credit purposes, although it was more pronounced in housing credit.
Consumer credits and other purposes also increased, registering increases of 0.7 billion euros and 0.8 billion euros, respectively, reaching 6.4 billion euros and 2.5 billion euros.
The average interest rate on new home loans fell from 4.19% in December 2023 to 3.20% in December 2024, a decrease of 0.99 percentage points (pp). This was the 14th consecutive monthly reduction.
Throughout 2024, the average interest rates for new and renegotiated housing credit contracts followed the same trend, settling at 3.11% and 3.60%, respectively, by the end of the year.
In euro area countries, the average interest rate on new housing loans dropped by 0.65 pp to 3.35%. Portugal had the 7th lowest interest rate in the region, below the euro area average.
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